ECONOMIC DIMENSION. The CIS model also includes a crucial third dimension: the economic dimension (which does not appear in the figure shown in section 3.1 for simplicity's sake). The cost of the various solutions to be implemented shall be assessed according to the level of their achievements. Besides initial design and development costs, companies shall consider the impact on costs for operations and future evolutions. The approach to CISs based on the CIS model and the control of both the associated methods and the design and implementation techniques provide a global and “preventive” view making it possible to anticipate: The effects of a solution on all the criteria (see section 3.5 Interdependencies of requirements). Its impact in terms of costs (investment and recurrent costs). Moreover, at equal cost, businesses will prefer a solution with a favourable impact on several of the CIS model's criteria. Over the entire life cycle of a system, experience shows that this “systemic” method effectively addresses the CIS model's requirements and has lower total costs than a standard “analytical” approach. Figure below illustrates this. The higher the compliance level, the more the company benefits from this approach to CISs.
ECONOMIC DIMENSION. Although the economic impact is not a separate section in the report of EMF, this is shown to be very important since almost half of the CE indicators in table 1 cover the economic dimension. Xxxx et al. (2018) used an extensive economic analysis based on the Life Cycle Costing (LCC) method. The LCC could help decision-makers to detect opportunities to reduce costs. In their research, they designed the life cycle costing for the canning industry. However, with small changes, such as replacing the cost of pre-processing of raw materials with the cost of distribution, this can be generalised to the fashion industry as well. 𝐿𝐶𝐶 = 𝐶𝑅𝑀 + 𝐶𝑀 + 𝐶𝑃 + 𝐶𝐷 + 𝐶𝑊𝑇 In this formula, 𝐶𝑅𝑀 stands for the cost of raw materials, ��𝑀 are the costs of processing and manufacturing, 𝐶𝑃 are the costs of the packaging, 𝐶𝐷 are the costs of the distribution and 𝐶𝑊𝑇 are the costs of the waste treatment. In the next step, the value added (VA) is calculated. The most logical formula for the value added, given the Life Cycle Costing, is presented by Xxxxxx & Xxxxxxxx (2016). They stated that the value added is the difference between total incomes and costs of bought-in materials and services. In this formula, WP is the wholesale price and LCC is the Life Cycle Cost calculated with the formula above. Therefore, this describes the profit margin for each product, and thus provides an insight into the value to the manufacturer and retailer, and the society at large when calculating the value added taxes. However, most of the time retail prices are used due to the lack of data about the wholesale prices (Laso et al., 2018). Next to Laso et al., Xx Xxxx (2017) also used value added in his value-based resource efficiency indicator. Although the formula was a little bit different, the principle is the same: VA = gross output (GO) – energy (E) – materials
ECONOMIC DIMENSION. Niche climate services and climate issues are discussed as economic factor (cf. Xxxxxxxx et al. 2017: 29-30) in many ways—here is just a rough indication of the breadth of this ongoing discourse:
a) Socio-economic benefits (SEB): There is a stream of argumentation that suggests that social and economic value can be added through utilisation of weather and climate services (Xxxx/Xxxxxx 1997; World Bank 2008). The approaches of appraisal of benefits of weather- related services (analyses of cost-benefit ration, willingness-to-pay, and weather service chains) are still developing, with only few studies available, and even more so for climate services (Perrels et al. 2013: 68).
b) Job creation: A key report ‘Joint Business Declaration—Increasing Europe’s climate ambition will be good for the EU economy and jobs’51 finds: “Job creation will result from the expansion of demand for low-carbon energy. But this expansion will not happen accidentally: it will be driven by government policy.” (GCN 2009: 6). Low-carbon jobs are also defined service jobs: “low-carbon jobs as those that are created either directly as a result of the expansion of the low-carbon energy economy or indirectly through supplying sectors with in that economy with goods and services” (ibid.: 4)
